Setting Your Rates on Upwork
Breaking down the what, why, and how of setting a freelancing standard rate.
There are a lot of articles out there about freelancing on Upwork. I should know — I’ve written quite a few of them. A lot focus on getting started, interacting with clients, or scheduling your time, and that’s all incredibly important information, but there are very few that focus on the brass tacks of freelance work.
For instance, I haven’t come across many articles dealing with how to determine your hourly rate as a new-to-the-field freelancer, or how that factors into applying for work. So, I thought I’d fill the void. Here’s a basic run-down for how to set up and stick to your hourly rate on Upwork.
Before we get started, though, I want to be clear — I’m not an expert. I’m not the be-all-end-all answer to this, and my advice isn’t bulletproof. What I am, though, is a professional who’s figuring all of this out as she goes, and I want to make it easier for people to break into a field that is rarely explained in schools when people are picking out careers. Yes, I want you to use this article as a jumping point, but I highly recommend that you do your own research as well, and make the decision that’s best for you and your business.
Okay, got that? Great! Let’s dive in.
What is my profile rate?
Your profile rate is the standard amount that you charge per hour of work. It’ll be the default rate for proposals that you send, although of course, you can change it from project to project as needed. This is how your income as a freelancer is determined, and it’s set completely by you.
It’s also displayed on your public freelancer profile, right at the top beside your headline. This rate can be seen by clients, agencies, and other freelancers, which means that, if you’re going to propose a higher rate than you’ve posted publicly on a particular job, you’re going to want to explain that higher rate in your proposal.
There are a few things that can make your rate go up. If a job is particularly time-intensive, or if it covers a difficult or sensitive subject, you might up the rate a bit. If it’s a rush job, you might charge a fee for that. Otherwise, your standard rate is going to be what clients should expect to pay for your services.
How should I determine my rate?
There are a lot of ways to determine your rate, but the basic formula for getting a solid number is as follows:
(Ideal Hours Worked Per Month) x (Rate) = (Ideal Monthly Income)
You choose how many hours you want to work per month and how much you want to make, then divide that income by the hours. That’s your rate. For instance, if I wanted to make $1,600 per month (for the ease of division), and I wanted to work 160 hours per month (a normal, 40-hour workweek), my hourly rate would be about $10 per hour.
Now, of course, your work is worth far more than $10 per hour. When determining your rate, you need to take into account your years of experience and education, and the value of your labor. Many clients are happy to pay solid rates for even a beginner freelancer with a good resume. You don’t need to lowball your rates to get work, you just need to apply to a lot of jobs and do good work on the jobs you win.
What’s the difference between fixed-rate and hourly projects?
An hourly project is the kind of work you’re probably used to doing. You set an hourly rate and record your time (Upwork has a lovely desktop tracker app), which is tallied up and sent to your client at the end of the week for approval. When it’s approved, you’re paid for it, as simple as that.
Most hourly contracts will have a set limit, between 10 and 30 hours a week depending on the work needed, and anything above that will need to be specially approved by your client. You can also insert manual time if, for instance, you forget to start the tracker, or are getting backpay for sample work done before the start of the contract.
A fixed-rate contract, on the other hand, is a project for which there is a set budget. These projects are pre-funded in Upwork via a service called Escrow, which puts the client’s money on hold while you work. When you submit your work to the contract and the client approves it, the money is released and you get paid.
Fixed-rate contracts payout in two different ways; either, the entire contract amount is paid out once all the work has been delivered, or you’re paid in parts, called milestones, throughout different stages of the project. Take for instance a project in which you’re hired to write a book. Because books take a long time to write, you might have milestones for each chapter, then another few for revisions. This means that your client is guaranteed to see regular progress, and you are unlikely to be ghosted or scammed into unpaid work.
With an hourly contract, the rate you’re using is almost always going to be your profile rate. With fixed-rate projects, it gets a little more complicated. You’ll need to estimate how much time you plan to spend on the piece and find a way to make that comparable to your hourly rate. Personally, I tend to charge fixed-rate projects by the word based on roughly how long it will take me to write the piece.
Importantly, in fixed-rate projects, always include a charge for the research you need to do for it. Charging only by how long it takes you to write a draft means you wouldn’t be paid for taking notes, reading articles, or conducting interviews for research. Take those into account when proposing a budget; when you make your own schedule, any and all of your time is valuable.
Your Rate is Not High Enough
Having read all of that, you’re probably getting ready to set and determine your rate on your profile. Let me give you one more piece of advice before you go, though.
Raise your rate. Whatever you’ve put down, make it higher.
We have a bad habit of selling ourselves short when it comes to valuing our own work. You might be thinking that you can’t possibly charge that much because you don’t have the right amount of experience, or because you don’t have formal training, or because you’re new to the site. So we set our rates far too low and end up scraping.
The truth is, though, that clients looking for good work are usually happy to pay fairly for quality, even from brand-new faces. Those that aren’t willing to pay you a decent wage aren’t clients you want to work with anyway. If you find you need to adjust your rate down later, you can do that, but it’s significantly harder to raise a rate than it is to lower one.
Like I said, your time is valuable and so is your talent, and when you’re a freelancer, what you’re selling is your time and your talent. You are your own product, and you deserve to charge what you’re worth.